241 principles of accounting exam 2
What is the first account that should be listed in the post-closing trial balance?
Cash
Which account would normally not require an adjusting entry?
Cash
the classified balance sheet will show which asset subsections?
Current Assets and Property, Plant, and Equipment
Which of the following accounts would be closed by posting a debit to the account?
Fees Earned
Which one of the fixed asset accounts listed will not have a related contra asset account?
Land
On the balance sheet, owner's equity is
added to liabilities and the two are equal to assets
The income statement should be prepared
after the balance sheet and before the statement of owner's equity
The statement of owner's equity should be prepared
after the income statement and before the balance sheet
The account type and normal balance of Prepaid Expense are
asset, debit
Unearned fees appear on the
balance sheet as a current liability
Accumulated Depreciation appears on the
balance sheet in the Property, Plant, and Equipment section
Prepaid insurance is reported on the balance sheet as a
current asset
The adjusting entry to record the depreciation of a building for the fiscal period is
debit Depreciation Expense; credit Accumulated Depreciation
Smokey Company purchases a one-year insurance policy on July 1 for $3,600. The adjusting entry on December 31 is
debit Insurance Expense, $1,800; credit Prepaid Insurance, $1,800
The entry to close the appropriate insurance account at the end of the accounting period is
debit Owner's Capital; credit Insurance Expense
Buster Industries pays weekly salaries of $30,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is
debit Salary Expense, $12,000; credit Salaries Payable, $12,000
Prepaid expenses are eventually expected to become
expenses when their future economic value expires or is used up
The account type and normal balance of Unearned Revenue are
liability, credit
Adjusting entries are
needed to bring accounts up to date and match revenue and expense
Deferred revenue is revenue that is
not earned but the cash has been received
Prior to an adjusting entry, prepaid expenses have
not yet been recorded as expenses and not been paid
The cash basis of accounting records revenues and expenses when the cash is exchanged, while the accrual basis of accounting
records revenues and expenses when they are incurred
There are two closing entries. The first one is to close _____; the second one is to close _____.
revenues and expenses; the drawing account
Which of the following is an example of an accrued expense?
salary owed but not yet paid
Which of the following is an example of accrued revenue?
snow removal services that have been provided but have not been billed or paid
The matching principle
states that the revenues and related expenses should be reported in the same period
Using accrual accounting, revenue is recorded and reported only
when the services are rendered without regard to when cash is received
Using accrual accounting, expenses are recorded and reported only
when they are incurred, whether or not cash is paid
The balance in the office supplies account on January 1 was $7,000, supplies purchased during January were $3,000, and the supplies on hand on January 31 were $2,000. The amount to be used for the appropriate adjusting entry is
$8,000
Fees payable would appear on the balance sheet as a(n)
.liability
After posting the first closing entry to the owner's capital account, the balance will be increased (decreased) by
the net income (net loss) for the period
Which of the following is considered to be an accrued expense?
A computer technician has installed the latest software updates, but you have not received an invoice or made payment
What is the major difference between the unadjusted trial balance and the adjusted trial balance?
The adjusted trial balance reflects the updated balances in the accounts after the adjusting entries.
Which of the following accounts ordinarily appears in the post-closing trial balance?
Unearned Rent
Which of the following is considered to be unearned revenue?
theater tickets sold for next month's performance
Closing entries are dated in the journal as of
the last day of the accounting period
